Medifast Reports Record First Quarter 2009 Financial Results

Record Quarterly Revenues: $33.7 million vs. $25.2 million - Increase of 34%

Record Quarterly Diluted EPS: $0.17 vs. $0.10 - Increase of 70%
Operating Margins Improve to 11.9%

OWINGS MILLS, Md., April 29 /PRNewswire-FirstCall/ -- Medifast, Inc. (NYSE:
MED) announced today first quarter financial results for the period ended
March 31, 2009.

First Quarter highlights included:
-- First quarter revenues increased 34% compared to 2008 to $33.7
million;
-- Diluted EPS for the quarter increased 70% to $0.17 versus $0.10
year-over-year;
-- Direct sales segment, Take Shape for Life, increased sales 92%
year-over-year for the quarter;
-- Medifast Weight Control Centers quarterly revenues increased 72%;
-- Improvement achieved in direct response revenue-to-spend ratio;

-- Operating margins improve to 11.9% versus 8.2% in the comparable
quarter

For the first quarter ended March 31, 2009, Medifast reported revenue of $33.7
million, a 34% increase from $25.2 million in the first quarter of 2008. The
Company reported net income of $2.5 million, or $0.17 per fully diluted share,
compared with $1.4 million, or $0.10 per fully diluted share in the first
quarter of 2008, a diluted EPS increase of 70%.

"We are extremely pleased with the record results of the first quarter,"
commented Michael S. McDevitt, Chief Executive Officer of Medifast, Inc. "Our
business model is showing growth or improvement across all segments and is
gaining traction with the more than 200 million Americans who are currently
overweight or obese, and are looking for a solution that is safe and
effective. With nearly 30 years of clinically proven results and having been
recommended by over 15,000 doctors, Medifast is clearly differentiating itself
from the commercial weight loss companies, and becoming the leader in the
medical weight loss marketplace."

Mr. McDevitt continued, "Revenues in the direct sales segment, Take Shape for
Life, increased 92% to $18.9 million compared with $9.8 million in the
comparable quarter of 2008. Growth in revenues for the segment was driven by
increased customer product sales as a result of an increase in active health
coaches. The number of active health coaches during the first quarter
increased to approximately 4,000 compared with 2,200 during the period a year
ago, an increase of 82% and up from 3,400 at the close of 2008. We continue
to see the benefits of a physician-lead network of coaches that are able to
support their clients in their weight-loss efforts. In today's environment
where trust and recommendation are becoming a more important component in
purchasing decisions, Take Shape for Life continues to excel. TSFL customers
who have utilized the Medifast products and programs and successfully have
addressed their body weight and health issues are increasingly choosing to
become active health coaches. Their personal success serves as a first-hand
example of the benefits that can be achieved through the Medifast weight loss
program. Leading by example provides the credibility needed to help friends,
family and clients to meet their personal health goals. We are proud of the
work that our health coaches do to help get America healthy."

"We also saw improvement in the revenue generated on every dollar spent on
advertising spent in Medifast Direct, our direct response segment. During the
first quarter, our revenue-to-spend improved to 2.6 to 1 versus 2.5 to 1 in
the first quarter of 2008 on an advertising budget of $4.3 million in the
first quarter. That equates to an additional $450,000 of revenue with
essentially no associated advertising cost. The overall advertising spend in
the first quarter was down approximately 17% from the spend in the same
quarter last year, however, with the improved efficiencies, each dollar spent
brought in more bottom-line profit for the business. The improvement in
efficiency played a large role in the year-over-year EPS growth achieved in
the first quarter. Looking ahead, we will continue to focus on generating
efficiencies in this segment."

"We also saw tremendous growth in our Medifast Weight Control Centers
segment," continued Mr. McDevitt. "Sales increased to $3.0 million compared to
$1.8 million, an increase of 72%. The growth in revenues for this segment was
attributed to increased same store sales, the opening of additional corporate
clinics during the second half of 2008 and the introduction of our franchise
model. For the first quarter, for clinics open greater than one year, we
experienced average monthly store sales of $53,000, a 12% increase versus the
prior year. We continue to be gratified by the strong same store sales growth
of this segment, which we believe bodes well for not only the continuation of
our corporate expansion, but also our franchise model."

The gross margins increased to 76.1% during the first quarter of 2009 versus
75.8% a year ago. Ms. Meg Sheetz, President and COO of Medifast, Inc.
commented, "The margin improvement is reflective of the addition of efficient
new machinery and process improvements achieved in our vertically integrated
business model."

Bradley MacDonald, Executive Chairman of the Board and Co-Founder of Take
Shape for Life said, "The Board of Directors is extraordinarily pleased with
the financial results of the Company in this tough economy. The Company posted
its 38th consecutive quarter of profitability by maximizing the leverage on
assets purchased over the last 10 years, and has achieved a 41% compounded
annual revenue growth rate since the year 1999. We are delighted with the
performance of our Management team in continuing to advance the clinically
proven Medifast products and protocols and helping millions of Americans
combat obesity."

The Company's balance sheet remains strong with stockholders' equity of $41
million and working capital of $15.9 million as of March 31, 2009. Cash and
cash equivalents increased by $4.5 million to $6.3 million at the end of the
quarter as a result of operating cash flows, improvements in inventory and the
decrease of capital expenditures.

Mr. McDevitt concluded, "As we have discussed in the past, we are beginning to
see tremendous leverage in our business model as our sales continue to
increase. Being completely vertically integrated is allowing us to improve
our gross and operating margins as fixed overhead is absorbed. We look
forward to continuing on the leverage achieved during the first quarter."

First Quarter 2009 Conference Call
The Company will hold a conference call and web cast to discuss the results on
Wednesday, April 29, 2009 at 11:00 a.m. ET.

Interested parties can access the call by dialing (877) 407-0782 or (201)
689-8567, or can listen via a live Internet web cast, which can be found at
www.choosemedifast.com in the section marked "Investor Relations." A replay of
the call is available via web cast at www.choosemedifast.com until July 30,
2009 or by playback at (877) 660-6853 or (201) 612-7415 through May 30, 2009.
Please use account #286 and conference #319100 for the replay.

About Medifast:
Medifast (NYSE: MED) is the leading easy-to-use, clinically proven
portion-controlled weight loss program. Medifast has been recommended by
15,000 physicians and used by over one million customers. Medifast is
committed to enriching lives by providing innovative choices for lasting
health. Medifast programs have been proven effective through studies by major
university teaching hospitals. The company sells its products and programs via
four unique distribution channels: 1) the web and national call centers, 2)
national network of physicians, 3) medically supervised Medifast Weight
Control Centers, and 4) the Take Shape for Life direct-selling division, a
network of health coaches. Medifast was founded in 1980 and is located in
Owings Mills, Maryland. For more information, log onto
http://www.ChooseMedifast.com. MED-F

Safe Harbor:
Please Note: This release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E
of the Securities Exchange Act of 1934, as amended, and the Private Securities
Litigation Reform Act of 1995. These forward-looking statements generally can
be identified by use of phrases or terminology such as "intend" or other
similar words or the negative of such terminology. Similarly, descriptions of
Medifast's objectives, strategies, plans, goals or targets contained herein
are also considered forward-looking statements. Medifast believes this release
should be read in conjunction with all of its filings with the United States
Securities and Exchange Commission and cautions its readers that these
forward-looking statements are subject to certain events, risks,
uncertainties, and other factors. Some of these factors include, among others,
Medifast's inability to attract and retain independent Associates and Members,
stability in the pricing of print, TV and Direct Mail marketing initiatives
affecting the cost to acquire customers, increases in competition, litigation,
regulatory changes, and its planned growth into new domestic and international
markets and new channels of distribution. Although Medifast's believes that
the expectations, statements, and assumptions reflected in these forward-
looking statements are reasonable, it cautions readers to always consider all
of the risk factors and any other cautionary statements carefully in
evaluating each forward-looking statement in this release, as well as those
set forth in its latest Annual Report on Form 10-K and Quarterly Report on
Form 10-Q, and other filings filed with the United States Securities and
Exchange Commission, including its current reports on Form 8-K. All of the
forward-looking statements contained herein speak only as of the date of this
release.

Contact: Brendan Connors Lytham Partners, LLC
Vice President - Finance Joe Diaz
ir@choosemedifast.com Robert Blum
Joe Dorame
602-889-9700

Financial tables to follow:

MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, December 31,
2009 2008
ASSETS
Current assets:
Cash and cash equivalents $6,297,000 $1,841,000
Accounts receivable - net of allowance
for doubtful accounts of $100,000 574,000 448,000
Inventory 12,363,000 13,856,000
Investment securities 1,129,000 1,099,000
Deferred compensation 451,000 531,000
Prepaid expenses and other current assets 1,925,000 2,034,000
Prepaid income tax 1,091,000 1,131,000
Note receivable - current 180,000 180,000
Deferred tax asset 100,000 100,000
Total Current Assets 24,110,000 21,220,000

Property, plant and equipment - net 21,626,000 21,709,000
Trademarks and intangibles - net 5,122,000 5,547,000
Deferred tax asset, net of current portion 1,241,000 1,131,000
Note receivable, net of current portion 1,046,000 1,080,000
Other assets 352,000 350,000

TOTAL ASSETS $53,497,000 $51,037,000

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $4,832,000 $5,130,000
Line of credit 3,179,000 3,164,000
Current maturities of long-term debt 257,000 257,000
Total Current liabilities 8,268,000 8,551,000

Long-term debt, net of current liabilities 4,249,000 4,313,000
Total liabilities 12,517,000 12,864,000
Stockholders' equity:

Common stock; par value $.001 per share;
20,000,000 authorized; 14,689,960 and
14,585,960 shares issued and outstanding,
respectively 15,000 15,000
Additional paid-in capital 31,227,000 30,787,000
Accumulated other comprehensive (loss) (447,000) (389,000)
Retained earnings 17,738,000 15,253,000
48,533,000 45,666,000
Less: cost of 301,092 and 272,192
shares of common stock in treasury,
respectively (2,058,000) (1,956,000)
Less: unearned compensation (5,495,000) (5,537,000)
Total Stockholders' Equity 40,980,000 38,173,000

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $53,497,000 $51,037,000

MEDIFAST, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

Three Months Ended
March 31,
2009 2008
Revenue $33,680,000 $25,169,000
Cost of sales 8,054,000 6,100,000
Gross Profit 25,626,000 19,069,000

Selling, general, and administration 21,610,000 17,007,000

Income from operations 4,016,000 2,062,000

Other income/(expense)
Interest expense, net (5,000) (65,000)
Other income/(expense) (35,000) 36,000
(40,000) (29,000)

Income before provision for income taxes 3,976,000 2,033,000
Provision for income tax (expense) (1,491,000) (668,000)

Net income $2,485,000 $1,365,000

Basic earnings per share $0.19 $0.10
Diluted earnings per share $0.17 $0.10

Weighted average shares outstanding -
Basic 13,284,431 13,101,157
Diluted 14,494,898 13,799,293

SOURCE Medifast, Inc.

Brendan Connors, Vice President - Finance of Medifast, Inc.,
ir@choosemedifast.com; or Joe Diaz, Robert Blum, or Joe Dorame, all of Lytham
Partners, LLC, +1-602-889-9700, for Medifast, Inc.